Treasury 10-year auction outlook:
Treasury 10-year auction outlook: the $24 B reopened 10-year sale may be poor, like yesterday's 3-year offering, due to the big price swings since December, and especially with the richer yield levels. The when issued is now unchanged at 2.735%, having dipped from 2.745% earlier after the dovish Fed comments. And a stop here would be some 18 bps rich to December's 2.915%, and would be the lowest since last January. The note is mixed on the curve but isn't all that attractive. It's no longer trading special in repo either, suggesting only a marginal covering bid. Yet, dovish Fed comments, including two voters, could give the offering some support. The reception for the new German Bund was also decent, however, and spreads to other sovereigns remains wide. So there could be decent indirect bidding. The December reopening (also $24 B) stopped at 2.915% and garnered a 2.35 cover (2.51 average) and a 63.1% indirect bid (64.1% average). Direct bidders took 10.8%.